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Ad-supported video-on-demand (AVOD) services provide access to a wide variety of television shows and movies through online streaming, without requiring users to pay a monthly subscription fee. Instead, consumers view advertisements during playback. This unique monetization model has stimulated massive growth by addressing the need for affordable online entertainment amid economic uncertainty. AVOD platforms showcase popular licensed content from major studios alongside original programming produced exclusively for each service. By integrating intermittent commercials, consumers can browse extensive on-demand libraries for free or at nominal monthly rates.
The global AVOD Market is estimated to be valued at US$ 28.09 Billion in 2024 and is expected to exhibit a CAGR of 14% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
The rising popularity of AVOD services is attributable to key trends such as increased access to high-speed internet connections and larger screens for streaming. As online connectivity expands globally, more viewers are cutting traditional pay-TV subscriptions in favor of affordable digital options. Major media companies are investing heavily to bolster original slates and talent deals and differentiate their respective platforms. Significant partnerships are also amplifying content libraries, such as NBCUniversal pairing Peacock with the extended Comcast cable subscriber base. Consolidation across the industry will likely continue as larger corporations acquire smaller players to combine valuable content assets and user data. These factors are expected to sustain rapid audience growth and fuel further revenue opportunities for advertisers within the AVOD space over the coming decade.
Key players operating in the AVOD services market include YouTube (Google), Hulu (Disney), Peacock (NBCUniversal), Tubi (Fox Corporation), Pluto TV (ViacomCBS), IMDb TV (Amazon), Roku Channel (Roku), Crackle (Chicken Soup for the Soul Entertainment), Xumo (Comcast), Vudu (Walmart), The Roku Channel (Roku), Popcornflix (Screen Media Ventures), MX Player (Times Internet), Voot (ViacomCBS). Major players are focused on enhancing customer experience through personalized interfaces and original content offerings.
Porter’s Analysis
Threat of new entrants: Low as the AVOD market is dominated by large tech companies like Google, Disney, Amazon etc which have established user bases and content libraries.
Bargaining power of buyers: Medium as buyers have options of multiple free/low cost platforms but their choices are dictated by available content. Switching costs are low.
Bargaining power of suppliers: High as major media companies control popular video content and can negotiate better deals. Platforms are dependent on suppliers for unique content offerings.
Threat of new substitutes: High with emerging technologies like AI, VR, AR which can provide interactive and immersive experiences. Live sporting events and user generated content are also substitutes.
Competitive rivalry: Intense as top players aggressively invest in original content and customer acquisition to gain market share.
Regional Analysis: North America currently dominates the AVOD services market led by the US due to high internet and smartphone penetration with increasing consumption of OTT video content.
Europe is another major market for AVOD services driven by widespread availability of high-speed internet in countries like the UK, Germany, and France. The growing adoption of smart TVs and technological developments are propelling the European AVOD market.
Key Takeaways
The global AVOD Market is expected to witness high growth.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
